10 Things Online Data Collectors Won't Say

TaniaKaras

1. "We're always watching you."

If you're reading this on the Internet, chances are you're being followed. More than 200 data collection companies and ad networks use approximately 600 different tracking technologies to gather and sell information on people's web habits, according to Abine, an online privacy firm that tracks the trackers. The online advertising industry is a $31 billion business fueled largely by behind-the-scenes exchanges of consumers' personal online shopping and browsing habits.

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Web-based commercial data collectors work by quietly dropping bits of code called cookies on user computers, which allow collectors to track what people read, click or buy. That information, collected by companies such as BlueKai and DoubleClick (a Google subsidiary), is sold in real-time exchanges to ad networks, which then target segments of users with ads fitting their interests. Someone who just searched Expedia for information on Puerto Rico, for example, would be almost instantly hit with ads featuring San Juan hotels and resorts. Billions of these exchanges occur daily. Search engines and social networking sites such as Google and Facebook also track user data to generate targeted advertising. The result? The new cell phone or spring sandals users willed themselves not to buy show up in ads alongside their morning news.

Companies in the U.S. spend more than $2 billion annually to tap into consumer data, according to Forrester Research. Data trackers, ubiquitous across the web, are collecting, storing and sharing more information than ever before, says Chris Babel, CEO of online privacy solutions provider TRUSTe. "It's happening on nearly every site, all the time," he says.

2. "You can't really opt out of data tracking..."

People may "opt out" of the targeted advertising so common on the web, but that doesn't mean data collectors will stop following their every electronic move. In 2010, the Digital Advertising Alliance introduced a tool that alerts web users that their data is being collected and used for targeted advertising. Consumers who fill out an online form will no longer see targeted ads. However, their web click patterns will still be recorded, stored and sold to marketers, says Linda Woolley, executive vice president of the Direct Marketing Association, a trade group for marketers. Tracking companies built their businesses around using and selling their information to clients, she says.

And those who click "opt out" only get a temporary reprieve from the ads. As soon as they clear their browser cookies, users inadvertently opt back in, experts say, because they also get rid of the cookie that told ad networks not to target them. Consumers' best bet, say experts, is downloading a powerful, free add-on like Abine's, which works on all major browsers and continually updates itself to protect users from new trackers.

3. "…And 'Do Not Track' options won't stop us either."

In addition to "opting out," many web browsers now offer "do not track" options, which actually send a signal to data collectors telling them not to track users. Various web browsers have different default settings for tracking. Safari, for example, automatically blocks third-party cookies that track users. Firefox accepts cookies, so it is up to the users to go into the settings and turn them off.

Right now "opt out" and "do not track" are often the same in practice. In fact, recent privacy debates have centered on the ambiguous definition of the terms. Currently there is no industry-wide "do not track" standard. Studies show most web users interpret it to mean their data will not be collected, but the online ad industry interprets it to mean the same thing as opting out, Woolley says. Tracking companies will continue to collect information on web users, but they won't target them with ads based on their data.

Unfortunately not all data tracking companies comply with do-not-track requests, says Sarah Downey, a lawyer and privacy expert for Abine. "Right now, do not track doesn't necessarily stop data collection or development of profiles about you," says Downey. "And it doesn't stop your data from being stored, collected and sold to the highest bidder." According to Woolley, online advertisers continue dropping cookies on users who don't want to be tracked for their own internal purposes. "There are lots of operational reasons why data collection is needed," she says, such as fraud prevention and product development.

Currently the Federal Trade Commission is pushing browser makers to adopt do-not-track tools and encouraging online ad networks to respect users' do-not-track settings. In a report on digital privacy released by the FTC recently, the agency said it would support legislation that defines "do not track" as zero data collection.

4. "We know your secrets."

Data trackers may know a woman is pregnant even before she tells her loved ones. They figure it out based on the web pages and advertisements clicked on recently. Target recently came under fire for combing through customer shopping patterns to identify potential soon-to-be-parents. Like other retailers, Target assigns its shoppers with a personalized code that lets the company record their every interaction with the store, from e-mails to web browsing to physical store visits. (Target declined to comment.) True, this kind of data crunching is mostly innocuous, but many web users have a word to describe it: creepy.

Retailers have used predictive analytics for years to help parse customer buying patterns -- and consumers often benefit. After all, it's not the worst thing to see ads for bridal dresses just as one's planning a wedding. Browsing and purchase history tracking by retailers provide value to a customer they would miss if they weren't tracked, says Fatemeh Khatibloo, an analyst for Forrester Research who covers the consumer data economy.

The potential danger, say privacy experts, is data trackers' access to a new realm of information on the web. "It's not just your past purchase history," says Chris Conley, a technology and civil liberties fellow for the ACLU of Northern California. Online data collection could conceivably be troubling if web history is used against someone to deny a credit card, job or health insurance, says Babel.

Such practices would be against industry standards, says Woolley. "Marketing data should never be used to make those kinds of decisions. It should only be used for marketing purposes," she says.

5. "We don't know your name..."

As powerful as the data-tracking tools are, the one thing the software often doesn't know is: the user's real name. Instead, consumers' page visits are tied to a random string of numbers designed to keep personally identifiable information private. These unique IDs follow a user around the web, informing data trackers which ads he or she is statistically likely to click based on past web-browsing habits.

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